My Dog Ate the Mortgage -- Really!

'Tis time once again to think about settling our holiday debts, and as usual some of us have rung up quite a tab. The payments will be daunting, but of course we'll scrimp and save and eventually claw our way back to solvency.

But imagine a world in which the credit card companies, the banks, and your rich Uncle Julio didn't really care if they were paid back. Oh joy!

Evidently that was the dreamlike state of thinking favored by some people who, over the past fifteen years, received loans totaling about $12 million in taxpayer money to create decent homes for the downtrodden here in America's poorest city. (Apparently the guardians of the public purse over at Miami's Department of Community Development thought they were Santa Claus year-round during the late Eighties and most of the Nineties.)

But in early 1998, acting on a tip, inspectors from the U.S. Department of Housing and Urban Development (HUD) came to town. After a lengthy investigation they found that loan recipients were anywhere from months to years in arrears on their mortgage payments. The federal agency demanded the city collect the cash from 29 groups of debtors. Otherwise, HUD warned, Miami could say adiosto any more federal housing money. Moreover the U.S. government could force the city to reimburse HUD, an ugly thought for administrators still digging their way out of a $68 million deficit.

Almost without exception the debtors gave the city's Department of Community Development the same excuses, according to Jeffery Hepburn, an assistant director in the housing division. "What they basically said was that the neighborhood had changed, that they were experiencing substantial vacancies as a result of drugs and crime and just poor tenants, that they couldn't keep units occupied, had to evict people, blah, blah, blah. That's what their rationale was," Hepburn summarized. "No excuse is good when you owe."

Only Carlos Martell, a paid consultant for Miami Commissioner Angel Gonzalez's Allapattah Business Development Authority, had a different excuse. "He thought it was a grant," Hepburn marveled. The city didn't get back a dime of that $293,000 loan but now owns the property on which affordable housing was supposed to have been built. Unfortunately its assessed value is only $154,178. "More than likely there is going to be some loss," Hepburn ventured. "We're probably not going to get back dollar-for-dollar."

At HUD's urgings, Miami City Attorney Alex Vilarello is now buried in eighteen lawsuits trying to force these deadbeat debtors to pay back their loans or turn over their property. "There was a time when the city didn't kick their ass like they're doing now," Hepburn admitted. "I've got to be honest."